Moratorium on Yes Bank to be lifted on March 18
On March 5, the Reserve Bank of India (RBI) had put a moratorium on Yes Bank, restricting withdrawals to Rs 50,000 per depositor until April 3.
The government has notified the Yes Bank reconstruction scheme as per which the moratorium on the troubled private sector lender will be lifted on March 18.
Current administrator Prashant Kumar has been appointed the Managing Director and CEO of the newly-reconstructed board.
The Yes Bank Reconstruction Scheme 2020 shall come into force on March 13, the gazette notification said.
On March 5, the Reserve Bank of India (RBI) had put a moratorium on Yes Bank restricting withdrawals to Rs 50,000 per depositor until April 3.
"The order of moratorium on the reconstructed bank issued by the government...shall cease to have effect on the third working day at 18:00 hours from the date of commencement of this scheme," the notification said.
The scheme has been notified on March 13 and hence the moratorium will be lifted on the third working day or March 18.
When the RBI had put a moratorium on Yes Bank, it was unable to grant or renew any loan or advance, make any investment, incur any liability or agree to disburse any payment.
The regulatory actions came hours after finance ministry sources confirmed that SBI was directed to bail out the troubled lender.
Last year, the RBI had appointed former deputy governor R Gandhi to Yes Bank's board amidst the leadership turmoil, which was caused by the central bank's August 2018 action asking Co-founder and chief executive Rana Kapoor to step down by January 2019 on corporate governance concerns.
After Yes Bank was placed under a moratorium, digital payments were impacted as PhonePe, which depends on the bank for its transactions, could not operate. Other fintech operators who rely on Yes Bank to settle their transactions were also down.
But within 24 hours after announcing a downtime due to ‘unscheduled maintenance activity’, Bengaluru-based payments major PhonePe sprung back with UPI payment service live on its platform.
(Disclaimer: Additional background information has been added to this PTI copy for context)
(Edited by Saheli Sen Gupta)
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